Health Law's Employer Mandate Hits Another Speed Bump

Still waiting for job-linked health insurance? Check the size of your company.

VasilyeviStockphoto

Listen

Listening...

/

Originally published on February 11, 2014 2:55 pm

The Obama administration is, again, delaying implementation of a part of the Affordable Care Act that requires employers to provide health insurance to their workers (or, potentially, face penalties). But this time it's not the entire "employer mandate" that's being delayed (as it was in 2013) — just part of it.

For most businesses affected by the law (firms with fewer than 50 workers are exempt), the employer provisions will go into effect, as scheduled, on Jan. 1, 2015. The companies will, however, get a small bit of relief. For the first year, they will have to offer coverage to only 70 percent of their full-time employees, rather than 95 percent, as was originally written. Under the "final rules" issued by the Treasury Department, the 95 percent requirement won't kick in until 2016.

The biggest change announced Monday, however, offers a reprieve to not-quite-small businesses — firms that employ between 50 and 99 workers. These companies will get an additional year — until Jan. 1, 2016 — to meet the coverage requirements, if they promise neither to shed employees nor to cut employees' hours to get their firm into that 99-worker category.

"For the 2 percent of American businesses that have between 50 and 99 employees, the Treasury Department concluded that a phase-in was the most common-sense way to implement the law," says White House health policy adviser Phil Schiliro.

Republicans were quick to blast the administration for selective implementation of the law.

"Once again, the president is rewriting law on a whim," said House Speaker John Boehner in a written statement.

Sean Spicer, communications director for the Republican National Committee, was more direct. "I think there is a huge bit of irony," he told NPR, "that the administration and Democrats in Congress accused Republicans of trying to undo a law that they have unilaterally continued to undo or delay, week after week, as they have recognized how unpopular it is throughout the country."

But not everyone sees the move as purely political. Neil Trautwein of the National Retail Federation says his group is grateful for the new flexibility the rules provide.

Trautwein says the Obama administration has "proactively decided to address what appears to be a problem — that being the accommodation of some not-very-large businesses to the ACA, and the idea that you can't flip a light switch and instantly become compliant."

But the new rules also, conveniently, push back until well after the 2014 elections some of the difficult changes that some of those midsize businesses may have to make.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

This is ALL THING CONSIDERED from NPR News. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel.

The Obama administration put out word today of another delay in the implementation of part of the Affordable Care Act. This one affects smaller businesses and it has to do with the requirement for many employers to provide workers with health insurance or face fines.

Last year, the administration put off the employer requirements for a year, until January 1st, 2015. Well, now employers with at least 50 and as many as 99 workers can get an extra year if they ask for it. NPR's Julie Rovner joins us now. Hi, Julie.

JULIE ROVNER, BYLINE: Hey, Robert.

SIEGEL: And first, remind us what the requirements are for employers, what they have to do to provide under the Affordable Care Act.

ROVNER: Well, remember the smallest businesses, those with fewer than 50 workers, don't have to do anything. The administration likes to point out that 96 percent of all businesses, although it's just over a quarter of all workers, those with 50 or more workers will eventually either have to provide insurance to their full-time workers - those are people who work more than 30 hours a week - or else pay a fine. There is a complicated formula but in some cases, it's 2,000. In other cases, it's $3,000 per worker per year.

SIEGEL: So the requirement is taking effect mostly as scheduled next year, but not for all. Who's getting pass here?

ROVNER: Well, specifically, it's those mid-sized employers, those with from 50 to 99 workers. They can get one more year to come into compliance, but there are a couple of rules. One is that they can't cut back on their workforce just to get under that 100-person threshold. There have been a lot of reports of businesses cutting back to get under 50 workers in anticipation of the requirement the way it was originally written into the law. So the administration doesn't want to encourage employers to do that anymore.

SIEGEL: And, Julie, why are they doing this?

ROVNER: Well, they say it's to give these businesses more time because they are the ones that are less likely to already be offering health insurance. So obviously, they need more time to figure out how to do it. But it's also because 2014 is an election year. The administration is clearly worried about upheaval in the employer insurance market, particularly this fall, right as the House and a third of the Senate are on the campaign trail.

Now, since most larger employers already offer insurance, this won't have much of an impact on them anyway. It's only these smaller businesses, these ones in the middle, the 50 to 99 workers, that are feeling the effects of these new requirements right about now, so, hence giving them this extra year gets them out of that election year problem.

SIEGEL: Although it does make it look as if the law isn't quite ready for primetime yet during an election year. Are there any other changes that the administration is making to the employer requirement?

ROVNER: Yeah, there are. For next year, even those very large employers can avoid fines as long as they offer coverage to 70 percent of their full-time workers. It had been 95 percent. That's going to be put off until the year after. The new requirements also exempt volunteer firefighters and emergency responders from the requirements that they be offered health insurance. That had turned out to be one of these unanticipated glitches that had threatened to close down many volunteer fire departments if it hadn't been addressed. Congress had urged very strenuously that this be addressed.

SIEGEL: What's been the reaction from Republicans to this?

ROVNER: You know, Republicans have been agitating all along to delay the law, to the extent it hasn't been able to repeal it. So every time the administration delays particular pieces of it that it finds politically advantageous or unworkable, which has been the case sometimes, Republicans cry politics. Obviously, in some cases it has been. So this is already touching off yet another round of that fight once again.